Chapter 1 - Marketing Fundamentals
Marketing - is a process by which companies create value for customers and build
strong customer relationships in order to capture value from customers in return.
Market - the set of actual and potential buyers
When developing new products, companies should prioritize creating superior customer value.
Costumer value - means understanding and addressing customer needs (customer-centered
approach), engaging with the market for ideas (market-driven ideas) , and involving customers
in the development process( customer involvement). This approach leads to differentiated
products that solve major customer problems and offer compelling value propositions.
The Marketing Process
* capture value from consumers in the form of sales, profits, and long-term customer equity
1. Understanding the marketplace and customer needs
Needs:
● Desires that arise when a consumer’s actual state does NOT meet one’s
desired (ideal) state
● Physical needs (e.g., food, clothing), social needs (e.g., affection), individual
needs (e.g., self-expression)
Wants:
● The form human needs take as they are shaped by culture and individual
personality
● Learned manifestation of needs
● Product-specific needs or need satisfiers
Demands:
● Human wants that are backed by buying power
Marketing myopia= is the mistake of paying more attention to the specific
product a company offers than to the benefits and experiences produced by these
products.
Market offerings= some combination of products, services, information, or
experiences offered to a market to satisfy a need or want
2. Designing a customer value-driven marketing strategy plan
● Marketing management is the art and science of choosing target markets and
building profitable relationships with them.
Two questions to answer to design a winning marketing strategy:
● What customers will we serve? (target market)
● How can we best serve these customers? (value proposition)
Value proposition: the set of benefits of values that a brand promises to deliver to
customers to satisfy their needs.
Market segmentation= involves dividing a large market into smaller groups with similar
needs.
The societal marketing concept = the idea that a company’s marketing decisions should
consider consumers’ wants, the company’s requirements, consumers’ long-run interests,
and society’s long-run interests
Production concept is= the idea that consumers will favour products that are available
and highly affordable; therefore, the organization should focus on improving production
and distribution efficiency
Customer relationship management is the= overall process of building and maintaining
profitable customer relationships by delivering superior customer value and satisfaction
3. Marketing Mix
- Marketing mix: set of tools to implement the marketing strategy ( 4Ps)
1. Product - creating a market offering that satisfies customer needs ( include services,
solutions and experiences )
2. Price - refers to the amount charged for the offering
3. Place - involves making the offering available to target consumers through various
channels ( ex: traditional stores and digital platforms)
4. Promotion - encompasses engaging with the target consumers, communicating about the
offering, and persuading them of its value.
Designing a Customer Value Market
Integrated marketing program
● A comprehensive plan that communicates and delivers intended value
● Providing a unified & seamless experience to interact with the brand/company
Customer Relationship Management
● The overall process of building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction.
● Customer Perceived Value: difference between total customer-perceived benefits
and customer cost.
● Customer satisfaction: the extent to which perceived performance matches a
buyer’s expectations.
● Customer-Engagement Marketing: fosters direct and continuous customer
involvement in shaping brand conversations, experiences and community.
● Customer-Generated Marketing: consumer-to-consumer exchanges. Contents
created by customers; playing an increasing role in shaping brand experiences.
● Partner Relationship Management: working closely with insiders and outsiders
of the company (e.g., suppliers, channel partners) and jointly engage and bring
more values to customers.
5. Capture customer value